new investor looking for VTI

Discussion of the Cash portion of the Permanent Portfolio

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yannou974
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new investor looking for VTI

Post by yannou974 » Wed Apr 29, 2015 6:07 am

Hi guys,
I'm pretty new. Just finished that book. Amazing one...
BTW I'm french, with a terrible accent.

I'm looking to save a 1 year spending in cash.
Wanted to invest in VTI.

Not sure is VTI is this:
US4642874576

Any better option?

Thanks,
Yann
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Re: new investor looking for VTI

Post by dualstow » Wed Apr 29, 2015 6:19 am

Bonjour.
yannou974 wrote: BTW I'm french, with a terrible accent.
I can't hear it.  :)

I googled that code you provided and it brought up the iShares treasury ETF (ticker: SHY).  That is indeed a possible component of the permanent portfolio (pp), but it is not VTI. VTI is the etf for Vanguard's Total Stock Market fund.

Yahoo: http://finance.yahoo.com/q?s=vti
Vanguard: https://personal.vanguard.com/us/funds/ ... IntExt=INT
I'm looking to save a 1 year spending in cash.
Then, you might have the right code. It's "cash", but it has nothing to do with VTI.
Last edited by dualstow on Wed Apr 29, 2015 6:23 am, edited 1 time in total.
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Re: new investor looking for VTI

Post by barrett » Wed Apr 29, 2015 11:32 am

yannou974 wrote: BTW I'm french, with a terrible accent.
Meaning you speak English with a heavy French accent? This is totally OK. We don't care so much how your English sounds. If you speak bad French, that is offensive even to most Americans.
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Re: new investor looking for VTI

Post by yannou974 » Wed Apr 29, 2015 10:12 pm

Thanks guys for your reply.
I'm gonna love this forum.

So dualstow, your advice is to keep that 1 year spending in bank? In cash?
I was planing to invest it in a secure fund. Where I can withdraw anytime I would need it.
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Re: new investor looking for VTI

Post by dualstow » Thu Apr 30, 2015 8:09 am

Well, you yourself said you wanted it in cash.
Are you living in Canada? France? Hopefully some European pp investors will chime in with suggestions for an appropriate fund.
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Re: new investor looking for VTI

Post by yannou974 » Fri May 01, 2015 2:31 am

dualstow wrote: Well, you yourself said you wanted it in cash.
Are you living in Canada? France? Hopefully some European pp investors will chime in with suggestions for an appropriate fund.
Well for now I'm living in Thailand.
But I've got some back account in France...
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Re: new investor looking for VTI

Post by dualstow » Fri May 01, 2015 10:12 am

Ah, wow! I used to live in Bangkok, just for part of a year.
I hope you're enjoying the mango sticky rice.
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Re: new investor looking for VTI

Post by yannou974 » Fri May 01, 2015 11:00 pm

mango sticky rice.. my favorite ;)
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Re: new investor looking for VTI

Post by yannou974 » Sat May 02, 2015 12:57 am

Hi TennPaga,

Thanks for your reply.
The reason you're confused is because I'm confused also.

I've just finished that book. And I just want to to put action on it.
From my understanding, I need:
-25% cash,
-25% gold,
-25% bonds,
-25% stocks.

For now, I've got already 1 yr of savings.
I'm just trying to figure out what to do with it.
It might be a good idea to make it be available anytime...

Hope it'll be more clear for you. And you'll help me.
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Re: new investor looking for VTI

Post by yannou974 » Fri May 08, 2015 5:44 am

Anyone please?
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Re: new investor looking for VTI

Post by ochotona » Fri May 08, 2015 5:24 pm

People, shouldn't a European living in Asia really be in VT, and not VTI? VTI is not even close to being home country. VT is global, like his life.
Last edited by ochotona on Fri May 08, 2015 5:27 pm, edited 1 time in total.
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Re: new investor looking for VTI

Post by Kriegsspiel » Fri May 08, 2015 5:53 pm

ochotona wrote: People, shouldn't a European living in Asia really be in VT, and not VTI? VTI is not even close to being home country. VT is global, like his life.
That would probably depend on what kind of bonds he's holding?
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Re: new investor looking for VTI

Post by ochotona » Fri May 08, 2015 7:51 pm

Kriegsspiel wrote:
ochotona wrote: People, shouldn't a European living in Asia really be in VT, and not VTI? VTI is not even close to being home country. VT is global, like his life.
That would probably depend on what kind of bonds he's holding?
Yannou, what currency do you get paid in? And is living and spending money in Thailand going to be for a long time, or are you going back to Europe eventually? Your savings is in Euros. When do you want to spend your portfolio money? In a few years to buy an apartment or a car? Or for when you are old?

These are the three essential activities, are they not? (1) Earning money, (2) spending money, and (3) saving money. I think for most of us on this forum it's easy, because 1-2-3 are all in the same currency. Is your situation more complex than this? If so, I think it's a more complicated matter.

If I was going back to Europe in a few years, I'd have a Eurozone PP, and I don't know how to do that. VT is 50% USA, and 50% everywhere else, and it is sold in US Dollars. There must be funds in UK / Europe that have a heavy UK / Europe focus, sold in Euros, with minority USA exposure. But it's like European Airlines, we go to UK / Europe and we see airlines we have never seen in America like EasyJet.

If I was going to stay in Thailand a long time, or SE Asia, I would probably make a Singapore PP, or Aussie or New Zealand. Again, I don't know how to do that, but there is a Singapore blog.

If Thailand were to get very difficult, and you had to leave, where would you go? The place you would go to live might be the place you have your Portfolio, but only if it's a developed economy.

The problem with not having the Portfolio in the currency where is it going to be spent is that if you need to use it, and it devalues, then you will have less to spend. It could go the other way of course, too. But the point is there is added risk.

If you don't know where you will go, then maybe 1/2 European PP and 1/2 Singapore PP. Something like that. But I think you do have to be careful about the currency. Here is a dark thought, but if you died, who would get the money? Maybe it would matter to have the money closer to your family, and in the same currency.
Last edited by ochotona on Fri May 08, 2015 8:28 pm, edited 1 time in total.
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Re: new investor looking for VTI

Post by Tortoise » Sat May 09, 2015 5:15 pm

yannou974 wrote: For now, I've got already 1 yr of savings.
I'm just trying to figure out what to do with it.
It might be a good idea to make it be available anytime...
Yes, I think it's prudent for most people to build up a liquid (i.e., cash) emergency fund with six months' to one year's expenses before they start investing in the PP or any other investment strategy.

You definitely want your emergency fund to be as easily accessible as possible, so make it cash or short-term bonds. (SHY is fine.)

Good luck, and welcome to the forum!
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Re: new investor looking for VTI

Post by yannou974 » Sat May 09, 2015 9:24 pm

ochotona wrote: Yannou, what currency do you get paid in? And is living and spending money in Thailand going to be for a long time, or are you going back to Europe eventually? Your savings is in Euros. When do you want to spend your portfolio money? In a few years to buy an apartment or a car? Or for when you are old?

These are the three essential activities, are they not? (1) Earning money, (2) spending money, and (3) saving money. I think for most of us on this forum it's easy, because 1-2-3 are all in the same currency. Is your situation more complex than this? If so, I think it's a more complicated matter.

If I was going back to Europe in a few years, I'd have a Eurozone PP, and I don't know how to do that. VT is 50% USA, and 50% everywhere else, and it is sold in US Dollars. There must be funds in UK / Europe that have a heavy UK / Europe focus, sold in Euros, with minority USA exposure. But it's like European Airlines, we go to UK / Europe and we see airlines we have never seen in America like EasyJet.

If I was going to stay in Thailand a long time, or SE Asia, I would probably make a Singapore PP, or Aussie or New Zealand. Again, I don't know how to do that, but there is a Singapore blog.

If Thailand were to get very difficult, and you had to leave, where would you go? The place you would go to live might be the place you have your Portfolio, but only if it's a developed economy.

The problem with not having the Portfolio in the currency where is it going to be spent is that if you need to use it, and it devalues, then you will have less to spend. It could go the other way of course, too. But the point is there is added risk.

If you don't know where you will go, then maybe 1/2 European PP and 1/2 Singapore PP. Something like that. But I think you do have to be careful about the currency. Here is a dark thought, but if you died, who would get the money? Maybe it would matter to have the money closer to your family, and in the same currency.
Thanks for your reply ochotona. You've made some good points.
I'm getting paid in Euro. I'm plan to live in Thailand as long as possible (for now). I'm going back to Europe 2-3 times a year. For this I already got some money to spend in Europe.

I'm planning to invest money in the PP. So I can live on the interest in a few years. So I don't really want to spend the portfolio money. Just use the interest.

In my opinion, I don't believe in Euro. That's why I want to save is US. And, yes I don't plan to go back and live is Europe. If I have to change country, it's not gonna be in Europe!

If I die? My family will got the money. And I would like them to get it in US. Once again, I don't believe in Euro.

So with that informations, what should I do?
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Re: new investor looking for VTI

Post by yannou974 » Sat May 09, 2015 9:26 pm

Tortoise wrote: Yes, I think it's prudent for most people to build up a liquid (i.e., cash) emergency fund with six months' to one year's expenses before they start investing in the PP or any other investment strategy.

You definitely want your emergency fund to be as easily accessible as possible, so make it cash or short-term bonds. (SHY is fine.)

Good luck, and welcome to the forum!
Thanks Tortoise!
So you think I should go to SHY with my 1 year expenses?
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Re: new investor looking for VTI

Post by ochotona » Sat May 09, 2015 10:35 pm

yannou974 wrote: Thanks for your reply ochotona. You've made some good points.
I'm getting paid in Euro. I'm plan to live in Thailand as long as possible (for now). I'm going back to Europe 2-3 times a year. For this I already got some money to spend in Europe.

I'm planning to invest money in the PP. So I can live on the interest in a few years. So I don't really want to spend the portfolio money. Just use the interest.

In my opinion, I don't believe in Euro. That's why I want to save is US. And, yes I don't plan to go back and live is Europe. If I have to change country, it's not gonna be in Europe!

If I die? My family will got the money. And I would like them to get it in US. Once again, I don't believe in Euro.

So with that informations, what should I do?
Well, I think you have made up your mind, I think you are buying USA assets! You face some risk converting from Euro to Dollar, but at least it's not Thai Baht to Dollar.

I think everyone here would agree on the ETFs you should buy:
Stocks - VTI
Gold - IAU
Long-Term bonds - TLO
Cash or short term US Treasury bonds - SHY

Also, I still think it would be a good idea to put up to 5% of the portfolio in non-USA stocks, and since you don't want to invest in Europe, and you live in Asia, maybe Japan ETF EWJ, a Hong Kong ETF EWH, Pacific/Asia excluding Japan, EPP. Then 20% in VTI.

What I do not know is how do you get an account to open a brokerage account where you can buy these ETFs at a low cost. Keeping cost low is very important. I am sure you can open a Thai account to buy these ETFs, and I am sure you will probably pay too much money. But if you open a USA brokerage account, you will need a USA Tax Identification Number, and you will have to pay USA taxes on the accounts.

Go to tdameritrade.com or schwab.com and find out if you can open an account from Thailand.

In the Schwab world,

VTI = SCHB
TLT = TLO
SHY = SCHO
IAU = SGOL

Maybe you can get a French brokerage account, but only keep these USA assets in it.
Last edited by ochotona on Sat May 09, 2015 10:49 pm, edited 1 time in total.
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Re: new investor looking for VTI

Post by Tortoise » Mon May 11, 2015 2:50 am

yannou974 wrote: So you think I should go to SHY with my 1 year expenses?
SHV might make a little more sense for an emergency fund (it's what I use) since its bonds are shorter duration and it's therefore less sensitive to movements in interest rates. SHY will move around a bit more in response to interest rates, but its bonds are still relatively short duration so probably still okay for an emergency fund.

I highly recommend reading the "Cash" chapter of Craig and MediumTex's book for a better and more detailed explanation of the safest options for cash.
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Re: new investor looking for VTI

Post by yannou974 » Thu May 14, 2015 9:05 pm

Thanks guys for your reply. I really appreciate.
I will go for that and let you know how I'm going.
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